Tuesday, October 30, 2012

Grand Game: Broken Window / Hurricane Edition

I actually put off blogging this. 'Cause I could not believe the author--an "economist," and a "widely published" one at that, was serious. Had to be hoax. But then I thought about two words, and realized that it may be absurd, but it is not a hoax. The words, of course, were "Paul. Krugman."
(And, speaking of cheap copies, check this out. Amazing.)

So, Grand Game it up, folks. This is a target rich environment. If the author were correct, of course, then North Korea and Cuba would be the wealthiest nations on earth.

When government authorities facilitate rebuilding quickly and effectively, the process of economic renewal, in many tangible ways, can leave communities better off than before.Factoring in the multiplier effect of $15-$20 billion spent rebuilding yields an economic benefit from reconstruction of about $27-$36 billion.

10 comments:

How are you and Prof. Morici both members of the same profession?? How is this creative destruction multiplier effect argument not subjected to instant ridicule by now? Bastiat is spinning in his grave. Apparently we need to get more people listening to EconTalk...

If you *really* believe that destroying things is good for the economy, because of the inevitable spending to replace those items, then might I suggest gathering and burning every copy of every book by Don Boudreaux, Russ Roberts and Steve Horwitz.

Why then could we not use federal aid to pay for the replacement of those tomes? That money would be guaranteed to go into the economy, benefiting bookstores, shipping companies, printers, publishing houses, literary agents and Austrian economists.

(...and if that thought seems silly and frivolous to you, then you're obviously tied to the construction industry, or beholden to Big Glass.)

My first lesson in economics came when I was in high school. Some friend argued that the Vietnam war was helping "the economy." Weapons are manufactured goods! Employment for draftees!

I extrapolated: why not just make weapons and pack them and the soldiers into ships, which can sail halfway to Vietnam and then be sunk by the navy? We'd get all the benefits of war without the bother of killing a bunch of foreigners!

I had not yet heard of the broken glass fallacy. (It can't be that hard)

That it is with such solidarity and of purpose and conviction that so many can repeatedly spew such inane ideas as destruction is a positive. Sadly it is not that they spew but that others swallow that brings the rewind and replay of these and other such ludicrous theorems. Kudos must be paid to those who have spent decades enabling the dumbing down of the people to the point where even such fantastic fables as the broken glass fallacy are gulped with no more thought than breathing by a people more accepting than is a child from a parent.